Ricardo Company has predicted the following costs for this year for 50,000 units:
$$\begin{array} { l c c }
& \underline{\text { Manufacturing }} &\underline{\text { Selling and Administrative }} \
\text { Variable } & \$ 200,000 & \$ 25,000 \
\text { Fixed } & \underline{300,000} & \underline{75,000} \
\text { Total } & \$ 500,000 & \$ 100,000
\end{array}$$ What is the manufacturing cost markup needed to obtain a target profit of $100,000?

Question

Ricardo Company has predicted the following costs for this year for 50,000 units:
$$\begin{array} { l c c } 
& \underline{\text { Manufacturing }} &\underline{\text { Selling and Administrative }}  \
\text { Variable } & \$ 200,000 & \$ 25,000 \
\text { Fixed } & \underline{300,000} & \underline{75,000} \
\text { Total } & \$ 500,000 & \$ 100,000
\end{array}$$ What is the manufacturing cost markup needed to obtain a target profit of $100,000?

Quizplus · Accepted Answer

The Answer of Ricardo Company has predicted the following costs for this year for 50,000 units:
$$\begin{array} { l c c } 
& \underline{\text { Manufacturing }} &\underline{\text { Selling and Administrative }}  \
\text { Variable } & \$ 200,000 & \$ 25,000 \
\text { Fixed } & \underline{300,000} & \underline{75,000} \
\text { Total } & \$ 500,000 & \$ 100,000
\end{array}$$ What is the manufacturing cost markup needed to obtain a target profit of $100,000?

Ricardo Company Has Predicted the Following Costs for This Year